16 April 2010 | Author: D. Warburton Search Copywriter

Google first quarter profits beat expectations

Google has boasted a 37 per cent rise in net profits for the first quarter of 2010, largely thanks to increased spending by online advertisers. Google's boost in revenue is being viewed as indicative that the recession is finally coming to an end.

The London Evening Standard reports that Google's revenue climbed 23 per cent across the quarter to arrive at $6.78 billion (£4.39 billion). The web giant exceeded analysts' expectations by generating $1.96 (£1.26 billion) in the first three months of the year, compared to $1.42 billion (£919,000) for the same quarter in 2009.

Google's chief financial officer, Patrick Pichette, said the company will continue investing to "spur future growth in our core and emerging businesses as well as to help build the future of the open web."

A resurgence in online advertising spend due to the improving economy was integral to Google's profits, with pay-per-click advertising rising by 15 per cent year on year. Mr Pichette explained: "Large advertisers have come back in force versus last year. Going forward, we remain committed to heavy investment in innovation."

It was previously predicted that online advertising spend would rise in 2010, with a 7.6 per cent increase across Europe as a whole thanks to a boom in the mobile and video advertising markets. Google presently holds 90 per cent of the European search market, and its domination doesn't seem to be in danger of being toppled any time soon - despite the best efforts of Microsoft's Bing.

Analysts are understandably positive about Google's future and the search seraph's role in the improving economy, though some investors had hoped for even greater profits from a company that had exceeded forecast earnings on seven out of the past eight financial quarters. This rise may have been slightly hampered by the China situation, which Primary Global Research analyst Laxmi Poruri explained as a possible cause of the 4.6 per cent drop in Google's shares during after-hours trading.

"The stock may be reacting to uncertainty going forward in terms of currency fluctuations overseas and investors seeking more clarity on China," the analyst explained.

Google did not reveal the details of how sales of its Nexus One 'superphone' were faring, beyond stating that they were pleased with the "uptake." The profitable quarter also saw the Mountain View company adding almost 800 staff to bring its total workforce to 20,621 employees.

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